Initially, the BMF letter of 24 April 2020 provided for a flat-rate loss carryback in the case of a person liable to income tax or corporation tax. With the Second Corona Tax Assistance Act, which was published in the Federal Law Gazette on 30 June 2020, legal regulations have now been introduced which provide for a reduction of income or corporation tax prepayments for 2019 as a result of a lump-sum loss carryback subject to the following conditions:
- The taxpayer submits a written or electronic application to have the total taxable income for 2019 reduced by 30 % when assessing the advance payments for 2019. However, this does not apply as far as the total income includes income from non-independent activities.
- The advance payments for 2020 have already been reduced to EUR 0.
If a higher loss in 2020 can be substantiated, which is to be carried back into the 2019 budget, the higher amount can be taken into account when calculating the advance payments for 2019. The estimated loss carryback serves only to simplify matters but shall not cut off the path that has already existed up to now.
The loss carryback from 2020, which is already to be taken into account in the determination of the advance payments for 2019, is limited to the maximum amount of a loss carryback of EUR 5 million (or EUR 10 million in the case of a joint assessment of spouses) envisaged for the investment periods 2020 and 2021.
If the tax rate is then fixed for the 2019 tax assessment period, a provisional loss carryback for 2020 can be taken into account. This must then be adjusted to the actual loss situation in 2020, and the assessment for 2020 and the tax rate for 2019 must be adjusted accordingly. If this results in a subsequent tax payment for 2019, an interest liability will be forfeited in principle.